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eBay and Amazon See Opportunity in Rural America

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eBay and Amazon See Opportunity in Rural America
eBay and Amazon See Opportunity in Rural America

eBay and Amazon see opportunity in rural America and are calling for better resources to “unlock the digital potential” of rural sellers. There are 37 million working-age adults in the rural US who account for close to 15% of the adult population, but annual revenues of rural businesses represent only 3.7% of total gross revenues in the US economy, according to Amazon.

eBay published a post written by one of its sellers who called for economic development to help him and sellers like him compete in the modern, global economy.

Bill Ingersoll sells Motocross and ATV equipment on eBay. “Unfortunately, the national discussion has focused on how to “save” rural America,” he said. “Well, I grew up in rural upstate New York. Specifically, Sloansville, which is about 20 miles outside Schenectady. And we don’t need saving. We’re not asking for, and we wouldn’t accept, a handout. We’re entrepreneurial. All we want is the chance to compete in the modern, global economy.”

In his post, he cited three areas that were crucial for sellers like himself to succeed, which we’ve identified as follows:

1) Affordable, accessible USPS shipping
“Eighty percent of what I ship goes through the USPS. If prices go up substantially, or if I stop being able to rely on USPS service altogether, my business would suffer. And I simply can’t rely on private shippers, who charge large surcharges for pickup and delivery to rural areas.”

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2) Broadband access to the Internet (buyers and sellers)
“Rural America needs broadband access. My business exists because eBay exists, and almost all of my revenue comes through selling on the platform.”

3) Access to global markets
“Finally, a lot of people think globalization hurt rural America. I don’t know if that’s true, but if my business is any sign, the global economy can also be a real benefit to places like Sloansville. Increasingly, I’m selling parts overseas, to countries like the United Kingdom and Canada. It doesn’t take a PhD to see that the global economy gives me access to hundreds of millions of potential customers, and that’s where my business is going to grow.” And, he said, “Red tape in international trade is a guaranteed way to put rural America at a competitive disadvantage.”

Amazon also called for ways to improve the economic potential of those in rural America. It outlined recommendations for the private and public sectors, including the following:

1) Expanding education and training programs

2) Helping rural areas attract tech talent

3) Increasing the availability of high-speed internet access and mobile phone connectivity

Amazon commissioned the US Chamber of Commerce to research the topic, and said findings show the following:

  • Increased adoption of online tools and digital services for businesses across rural America could create more than 360,000 jobs in the next three years.
  • Increased adoption could grow annual revenues of rural small businesses by 21% over the next three years – the equivalent of $84.5 billion per year – with states in the South seeing the greatest benefit.
  • Online tools and technology have the highest potential impact on rural small businesses with annual revenue under $100,000.

According to the research, southern states are among the ones that would benefit the most from increased adoption of online tools and digital services, with rural businesses in West Virginia (+57.6%), Alabama (+32.9%), Mississippi (+32.8%), and Georgia (+31.5%) experiencing some of the largest revenue growths over the next three years. Texas, Ohio, and Mississippi would gain the highest number of new jobs, with the Lone Star state adding an average of 23,400 new jobs per year over the next three years.

The report, based on a survey of 5,300 businesses in rural America, outlined a number of recommendations for the public and private sectors to help unlock the unrealized economic potential of rural America, including:

  • One-in-five rural businesses are already digital. Nearly 20% of rural small businesses in America generate the vast majority of their revenue (at least 80%) by selling their products and services online.
  • Technology is boosting rural business revenues. Rural businesses say adoption of digital technologies are important for their future, with 55.2% of them agreeing that e-commerce helps them grow their customer base and a similar percentage (54.6%) confirming that online tools had a positive impact on their revenue in the past three years.
  • Online services help rural businesses reach customers out of state and overseas. Almost 40% of these small business owners say that digital technology has allowed them to sell beyond their state and 16% of them confirm they are selling internationally due to their access to digital tools. Thirty-three percent sell their products using their own websites, 12.7% use a third-party online sales site, and 35.7% use online marketing, including social media.
  • Digital tools and technology help purchasing and cut costs. 29% of rural businesses say that online tools reduce purchasing costs of products and materials.

More information about the study is available on the AboutAmazon.com website.

Ina Steiner on EmailIna Steiner on LinkedinIna Steiner on Twitter
Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com.

One thought on “eBay and Amazon See Opportunity in Rural America”

  1. I live in a rural area. Closest big town of over 20000 is almost 100 miles away. We survive on satellite Tv Direct Tv., we have a well for water, a septic tank for sewage and use LP gas for heat…..We do have one modern accessory Electricity. Our internet service which isn’t slow in fact is quit fast is hughes net satellite. This is available anywhere in the world so those that complain of slow service need to get it if they can’t get cable. We are a small town, one gas station and the owner still pumps gas and sells milk. If you need groceries the nearest full grocery story is about 42 miles up the road.

    We wouldn’t give up living here for anything. Two cars on the same road are considered a traffic jam.

    Now for the writer. Postal costs are the same for everyone. Urban or Rural. They pick up your packages for free even where we live and the postal drivers route is over 200 miles a day. Broadband access is available to everyone everywhere. You just have to pay for it. Nothing is free unless you have your hand out. Education can be gotten online on your computer at any time. You might have to pay for that also.

    As a member of a small town of maybe 500 we don’t want big business sticking their noses into our businesses. We do just fine as farmers and small sellers from home on the internet. If you want real money then get an education and get a job in one of those big towns down the road. We like our life just the way it is where everyone helps each other instead of trying to our jones the neighbors.

    If you need things its there. Right on the internet. But then of course you might have to pay something for it. NOTHING IS FREE

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